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The danger of being Franchisee No.1

Sure, it’s a thrill to get in on the ground floor of a hot new concept. But it’s risky to invest in an unproven business model. Here are questions to ask.

Is it wise to become one of the first franchisees in a new franchise system? Sure, it’s a thrilling proposition to get in on the ground floor of what is hopefully a superstar concept. And it might be particularly lucrative if start-up costs (compared with that of long-established franchises) are low.

But of course, the downside is that some new franchises don’t survive the journey and are buried in unmarked graves along the way.

Before buying into a young or unproven system, it’s important to weigh the pros and cons. Most people think of young franchises as small startups, but there are typically three types of businesses in this category, including established companies that have finally decided to franchise. The common denominator is that each is asking you to invest when there’s little or no proven results from other franchisees who have gone before you.

…to read this article in full, visit leading US entrepreneurial resource, Entrepreneur.com